Panama offshore jurisdiction: what holds and what changed

Published on September 1, 2026 · Updated on October 6, 2026

In short: Checked on October 6, 2026. Panama is still used for international structures, but under transparency rules that no longer fit the opaque image of a decade ago. The country left the FATF grey list in October 2023 and is not on the June 2026 update. On the European Union list of non-cooperative tax jurisdictions it remains on Annex I according to the last official update (February 17, 2026). Territoriality still applies, now with an economic substance test for certain passive income from 2027.

Contents of this guide

The short answer
What still holds and what changed
The international lists, with dates
Myths and facts
What it means for a structure today
What to check before using Panama
Frequently asked questions
Sources

The short answer: useful, but no longer opaque

Panama keeps two features that explain its international use: it taxes Panamanian-source income and not income earned abroad, and the corporation (sociedad anónima) remains a flexible, well-known vehicle. Everything else has changed since 2016: there is now a private beneficial ownership registry, mandatory accounting records, automatic exchange of financial information and a general ban on bearer shares. Anyone weighing Panama in 2026 is dealing with a regulated jurisdiction, monitored by international bodies and still closing one open item with the European Union.

The guide on how to set up an offshore company in Panama covers requirements and steps, and the one on taxes a company pays in Panama covers taxation. This article addresses a different question: which rules and which reputation come with a Panamanian structure today, and what is worth confirming before choosing it.

Key fact: An internationally used Panamanian company today is an entity whose beneficial owner is identified in a private registry, whose accounting is backed by its resident agent and which falls under automatic exchange of financial information, not an anonymous structure.

What still holds and what changed

Status as of the review date, October 6, 2026. The source column points to the official text when it could be opened and says so when the source is secondary.

Topic	Still holds or changed	Current status	Source
Territoriality	Still holds, with an addition	Foreign-source income is not taxed in Panama. From tax periods of 2027, entities in multinational groups with foreign passive income must show economic substance (Law 526 of 2026) or pay a definitive rate of 15%.	Icaza, González-Ruiz and Alemán; Executive Decree 32 of 2026, Official Gazette
Accounting records	Changed	Law 52 of 2016 requires certain legal entities to keep accounting records; Law 254 of 2021 amended it.	Official Gazette 28149-B; Official Gazette 29413-A
Beneficial owners	Changed	Law 129 of 2020 created a private, single registry system fed by resident agents and open to competent authorities.	Official Gazette 28985-C; KMK Legal (secondary)
Bearer shares	Changed	Prohibited: after December 31, 2015 corporate charters are deemed amended, except for companies that adopted the custody or immobilization regime.	Law 47 of 2013; Law 18 of 2015
Automatic exchange (CRS)	Changed	Panama made its first automatic exchange in September 2018.	CIAT
FATCA	Changed	Model 1 intergovernmental agreement with the United States: financial institutions report to the Panamanian authority, which exchanges with the IRS.	US Treasury, agreement text
FATF grey list	Changed	Off the list since October 2023.	Basel Institute
EU tax list	Pending	On Annex I according to the February 17, 2026 update.	European Commission

The international lists, with dates

FATF (grey list). The Financial Action Task Force removed Panama from its list of jurisdictions under increased monitoring in October 2023, after it had entered in June 2019, according to the Basel Institute on Governance summary. This status is reviewed at each FATF plenary session, so the body’s most recent statement is worth checking.

European Union (tax list). The European Commission reported on February 17, 2026 that Panama remained on the Annex I list of non-cooperative jurisdictions, together with nine others.

OECD (Global Forum). The EU list relies largely on the Global Forum’s assessments of transparency and exchange of information. The second-round report, dated November 2019, rated Panama partially compliant on exchange of information on request. Any new Global Forum review is the open item most likely to move the country’s reputation.

Myths and facts

Common idea	What the rules say	Source
Panamanian companies are anonymous	Bearer shares have been prohibited since 2015 unless held with an authorized custodian, and there is a beneficial ownership registry that authorities can access. The registry is private: the public cannot search it, but authorities can.	Law 18 of 2015; Law 129 of 2020
An offshore company pays no tax anywhere	Panama does not tax foreign-source income, but that says nothing about the owners’ country of residence, which may have its own reporting and tax rules.	Legal Solutions Panama; Radar Panamá
Panama is on a blacklist	It depends on the list: Panama is no longer on the FATF list and, as of today, remains on Annex I of the EU tax list, with its removal announced.	European Commission
Registering the company is enough	Since 2016 the rules also require backed accounting records and an identified beneficial owner, and from 2027 a substance test for certain passive income.	Law 52 of 2016; Decree 32 of 2026
Information exchange does not reach Panama	Panama exchanges financial information automatically since September 2018 and has a FATCA agreement with the United States.	CIAT; US Treasury

The expression “tax haven” is not a category in any of the lists cited here: the FATF assesses anti-money laundering controls, while the EU and the OECD assess tax transparency and tax practices. A jurisdiction can be in good standing on one and pending on another, as is the case for Panama.

What it means for a structure today

The practical conclusion is about compliance. Law 526 of 2026 covers companies and foundations that belong to a multinational group and receive foreign-source passive income, such as dividends, interest, royalties or capital gains. A company that is not part of a multinational group falls outside that regime, according to the law firm’s analysis cited here. The implementing rule, Executive Decree 32 of September 2, 2026, requires qualified staff, facilities and board meetings in Panama for those that are covered, according to La Estrella de Panamá.

Reputation with third parties also matters. While a country stays on an EU list, some European banks and counterparties apply additional controls; Radar did not find an official source that sets that consequence for Panama, so the concrete effect is confirmed with each counterparty. The firm Legal Solutions Panama puts it on its offshore company page: each bank has its own due diligence and approval process, and every case should be reviewed individually.

Define the real use of the structure: holding assets, invoicing foreign clients, investing or e-commerce. Each use triggers different rules.
Review the owners’ tax residence: the country of residence may require reporting of the Panamanian company and tax its income.
Determine whether there is a multinational group and foreign passive income: the substance test from 2027 depends on it.
Prepare the beneficial owner identification: the resident agent needs it complete and up to date.
Plan for accounting: Law 52 of 2016 requires backed records.
Consider the vehicle: the guide to corporation, LLC or foundation compares the options by use.

What to check before using Panama

The status of the lists on the day of the decision. The EU and FATF lists are updated in sessions and may change the picture in this article.
That the company exists in the registry. The Panama Public Registry allows online company searches.
That the resident agent complies. Accounting and beneficial owner data go through the agent: a registered, active agent lowers the risk of non-compliance.
The bank’s policy. Opening a bank account as a foreigner depends on each institution’s due diligence, not on the company alone.
The obligations in the country of residence. Filing for the company, for foreign accounts or for passive income, depending on the case.
The consistency of the purpose. A structure with clear, documented economic aims is easier to explain to a bank or an authority.

Legal Solutions Panama is a boutique corporate, tax and immigration law firm in Panama City serving foreigners and investors. Its offshore company page describes how these companies are formed and what each case requires, and its proposal is delivered after reviewing the specific case.

See offshore company formation in Panama

For structures with local operations, the firm also explains how to establish a company in Panama.

Frequently asked questions

Is Panama still a tax haven?

“Tax haven” is not an official category in the international lists, and Panama’s position today is mixed: it left the FATF grey list in October 2023, but as of the review date (October 6, 2026) it remains on Annex I of the European Union tax list. Panama taxes only Panamanian-source income, with a substance test for certain passive income from 2027.

Is Panama on the FATF grey list?

No. The FATF removed Panama from its list of jurisdictions under increased monitoring in October 2023. That status is reviewed at each plenary session, so the body’s most recent statement is worth checking.

Are Panamanian companies anonymous?

No. Bearer shares have been prohibited since 2015, except for companies that adopted the custody regime, and Law 129 of 2020 created a private beneficial ownership registry run through resident agents. The public cannot access that registry, but competent authorities can.

What is economic substance?

It is the requirement that an entity have real staff, facilities and decision-making in Panama so that its foreign-source passive income is not taxed. Law 526 of 2026 applies it to multinational group entities from tax periods of 2027; if they cannot show it, they pay a definitive rate of 15%.

Does Panama exchange tax information with other countries?

Yes. Panama exchanges financial information automatically under the Common Reporting Standard since September 2018 and has a FATCA agreement with the United States. It also answers tax information requests, an area in which the OECD Global Forum is expected to carry out an in-depth review in 2027.

Sources

All sources were checked on October 6, 2026. The information is general and does not replace advice from a qualified lawyer for the specific case. Official legal texts are in Spanish.

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Panama as an Offshore Jurisdiction: What Still Holds and What Does Not